市场见解

This needs to change before the Bega Cheese (ASX:BGA) share price rerates

Bega Cheese’s shares have been downgraded…
The post This needs to change before the Bega Cheese (ASX:BGA) share price rerates appeared first on The Motley Fool Australia. –

Key Points

Bega Cheese shares have been downgraded to a hold rating by Morgans
The food company’s recent trading update disappointed
But that wasn’t the main reason for the downgrade

The Bega Cheese Ltd (ASX: BGA) share price is finishing the week in the red.

In afternoon trade, the diversified food company’s shares are down 2% to $5.22.

Why is the Bega Cheese share price sliding?

The weakness in the Bega Cheese share price today appears to have been caused by a broker note out of Morgans.

According to the note, the broker has downgraded the company’s shares from an add rating to a hold rating.

This was driven partly by a trading update at the end of last year which fell short of Morgans’ expectations.

What did the broker say?

Morgans commented: “BGA has provided FY22 underlying EBITDA guidance of A$195-215m. This was 2-11% below Factset consensus of A$219.3m and Morgans previous forecast of A$217.0m.”

This weaker guidance reflects significant COVID costs, supply chain disruption, and a highly competitive milk procurement environment.

But it isn’t the guidance that has been the main driver of the broker’s downgrade. The biggest impact was the need for Bega Cheese to pay improved returns back to farmers. And until this changes, the broker doesn’t expect the Bega Cheese share price to rerate to higher multiples.

Morgans explained: “While we can look through short-term COVID impacts, we remain concerned about the industry structure which has resulted in the continual need to pay improved returns back to farmers at the expense of shareholders.”

“Until Australian processing capacity rationalises or the Australian milk pool materially grows, the competitive environment for milk is likely to remain fierce and result in dairy processors effectively overpaying for milk. This means that upside from favourable operating conditions is likely to be partially paid away to the dairy farmers as opposed to shareholders benefiting from the earnings upside. For this reason, despite its growing branded business (~80% of sales), BGA is likely to trade at a discount to its FMCG peers,” it concluded.

The post This needs to change before the Bega Cheese (ASX:BGA) share price rerates appeared first on The Motley Fool Australia.

Should you invest $1,000 in Bega Cheese right now?

Before you consider Bega Cheese, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Bega Cheese wasn’t one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

More reading

Why analysts slapped buy ratings on these ASX shares

Would you like cheese with that? A look at some of Twiggy’s highest profile ASX investments of 2021

These were the best performing ASX 200 shares last week

ASX 200 falls on Friday but records 13% gain in 2021

ASX 200 (ASX:XJO) midday update: Big four banks fall, Bega Cheese jumps again

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

随时随地,交易世界!

移动APP平台,拥有 12 个市场的 50,000 多种全球上市证券(全球市值超过 70%),直接在您的 Android 或 iOS 设备上即可操作。

与独有的交易理念和投资分析工具相结合,帮助您在我们 12 个全球市场中的几乎所有金融工具上找到可操作的见解,从而帮助您优化交易策略。

推荐给您的朋友

向您的朋友推荐Monex并赠予他们免费使用我们交易工具的机会

我们尊重您的隐私,只会向您的朋友发送一封邮件 

与您的朋友分享

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!